Strategic Planning

Every business needs to have a strategic plan as part of its normal operation. Running a business without a strategic plan is like flying an airplane with no guidance assistance. It is vital that each and every business has a strategic plan as part of its arsenal of operating tools. I really do not know of a successful firm that does not have a strategic plan.
In simple terms, a strategic plan bridges the gap between where the business is and where it wants to go. Starting from the business’ current position, the strategic plan develops the course of action the business will need to follow in order to achieve its future goals.

There are basically three primary steps in strategic planning. The first step is the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Basically, this is a process used to ascertain where your business is right now and what is happening outside your company. In my mind, the critical thing here is to carefully examine and identify your weaknesses as these must be remedied, if possible, in your strategic plan. The most common weakness is communications. Most businesses just do not do this as well as they could.

The second step in the strategic planning process is developing goals for the next two to five years that will allow your firm to grow and prosper. These goals should be both quantitative and qualitative. Quantitative goals are typically financial figures such as sales growth rates and net profits, and qualitative goals frequently include objectives like improving the customer service experience and improving the quality of new hires.

The final — and in my mind the most interesting — step in the strategic planning process is developing a tactical or implementation plan. The tactical plan charts the course that will allow you to reach the goals that you have set. This tactical plan includes a timeline showing what has to be accomplished each year and identifies the party that is responsible for each component of the plan.

Normally, a business’ top leadership team is included in the strategic planning process but then is gone over with all staff. After all, the more staff buy-in, the better. A strategic plan should be one that the whole staff — not just the CEO — considers theirs.

Typically, establishing a strategic plan takes about six hours, with the first three hours devoted to the SWOT analysis, and the remaining three hours covering the second and third steps. Additionally, in any strategic planning session, someone must be keeping notes and recording the decisions so that a written plan can be produced.

After a strategic plan has been agreed upon and written up, the next thing is to get the entire staff to understand the plan’s meaning and its implications for each of them personally. This is so important as, in order to be successful, any plan must be adopted by every person in your organization.

Developing a strategic plan should not be considered an optional but a necessary practice that occurs every year or two. Additionally, the plan should be revisited every month, and the progress — or the lack thereof — should be recorded. If perchance, things have changed, then altering the plan is fine as the strategic plan should be considered a guide and not a rulebook.

If needed, there are many consultants out there that can help you through this process. In fact, in so many ways, having an outsider as a facilitator is the preferred method of producing a strategic plan.

Now go out and make sure you have a great strategic plan to guide your business.

Jerry Osteryoung is the Director of Outreach of the Jim Moran Institute for Global Entrepreneurship in the College of Business at Florida State University, the Jim Moran Professor of Entrepreneurship; and Professor of Finance. He was the founding Executive Director of the Jim Moran Institute and served in that position from 1995 through 2008. He can be reached by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.